CESTAT: Oxygen concentrators qualify for COVID-era customs duty exemption

January 20, 2026 : The Customs, Excise and Service Tax Appellate Tribunal, New Delhi, has ruled that oxygen concentrators are entitled to customs duty exemption under Notification No. 20/2020-Cus, issued at the onset of the COVID-19 pandemic. Rejecting a narrow interpretation advanced by the Revenue, the Tribunal held that the exemption was not limited only to conventional ventilators but extended to all apparatus performing the function of therapeutic respiration, including oxygen concentrators.

The decision was delivered by a Bench comprising Justice Dilip Gupta, President, and C. J. Mathew, Technical Member, in an appeal filed by M/s Aspen Diagnostics Pvt. Ltd. against the Commissioner of Customs. The dispute arose from an import made in May 2020, during the early and most uncertain phase of the pandemic, when respiratory support equipment was in acute short supply across the country.

The importer had claimed a nil rate of basic customs duty under Notification No. 20/2020-Cus dated 9 April 2020, which exempted “artificial respiration or other therapeutic respiration apparatus (ventilators)”. Customs authorities denied the benefit, taking the position that the notification applied only to ventilators and not to oxygen concentrators, which, according to the Department, merely supplied oxygen without mechanically assisting respiration. On this basis, the goods were classified under tariff item 9019 2010, and a differential duty demand of ₹36.66 lakh was raised.

The Commissioner (Appeals) upheld the denial, relying on dictionary meanings, a contemporaneous press release issued by the Ministry of Finance, and a later notification issued in 2021 that separately mentioned ventilators and oxygen concentrators. The Tribunal, however, found this approach legally unsustainable and contextually misplaced.

Setting aside the appellate order, the Tribunal observed that the phrase “artificial respiration or other therapeutic respiration apparatus” is broad, functional, and purposive. It clarified that the parenthetical reference to “ventilators” could not be read as restricting the exemption only to that specific device. If the intent had been to exempt ventilators alone, there was no need for the notification to employ an elaborate descriptive phrase preceding the bracketed term.

The Bench stressed that exemption notifications issued under Section 25 of the Customs Act, 1962 must be read holistically and in light of the circumstances in which they are framed. In April 2020, the country was facing an unprecedented public health emergency, with hospitals overwhelmed and life-saving respiratory equipment in short supply. In such a scenario, the notification was clearly intended to provide immediate and broad-based relief, rather than being confined to a single category of equipment.

Rejecting the Revenue’s reliance on subsequent notifications, the Tribunal held that later legislative or executive actions cannot be used to retrospectively narrow the scope of an earlier beneficial exemption, particularly one issued as an emergency measure. It noted that the 2021 notification expanded coverage to accessories and attachments and could not be treated as a key to interpret the intent behind the 2020 notification.

In unusually strong language, the Tribunal criticised what it described as a hyper-technical and revenue-centric approach adopted by the authorities during what it termed “apocalyptic” times. It remarked that strict and insensitive interpretation of relief measures during a humanitarian crisis defeats the very purpose for which such exemptions are introduced.

The Tribunal also found a serious procedural lapse. It held that the assessing officer had failed to comply with Section 17(5) of the Customs Act, which mandates a reasoned speaking order when an exemption claim is denied. This defect, the Bench noted, was not cured by the Commissioner (Appeals), amounting to a breach of the statutory appellate scheme.

Concluding that oxygen concentrators squarely fall within the ambit of “artificial respiration or other therapeutic respiration apparatus”, the Tribunal allowed the appeal, set aside the impugned order, and held that the differential duty demand was unsustainable in law. The ruling brings clarity on the scope of COVID-era customs exemptions and reinforces the principle that beneficial notifications, especially those issued during public health emergencies, must be interpreted liberally and purposively.